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The Cole-Bishop Amendment to the Agricultural Appropriations Bill Amending the Grandfather Date for "Deemed" Tobacco Products Passes House Committee - What Next?

Date: Apr 29, 2016

On April 19, 2016, the House Appropriations Committee voted to include a bipartisan amendment, sponsored by Rep. Tom Cole (R - OK) and Rep. Sanford Bishop (D - GA), to the 2017 fiscal year Agricultural Appropriations bill that would amend the February 15, 2007 "grandfather date" for currently unregulated tobacco product categories, including nicotine-containing electronic vaping devices and the "e-liquid" used in them. The U.S. Food and Drug Administration (FDA) is expected to "deem" such e-vapor products subject to its authority under the Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act), pending finalization of the so-called "Deeming Regulation" (FDA-2014-N-0189). The inclusion of the Cole-Bishop Amendment in the appropriations bill has been hailed as a victory for the e-vapor industry, but there remains a long road ahead before this budget amendment can effectively change the statutory grandfather date for deemed products.

In 2009, the Tobacco Control Act amended the Federal Food, Drug, and Cosmetic Act (FDCA) to give FDA authority to regulate the manufacture, distribution, and marketing of tobacco products. Although the new law defined "tobacco product" broadly to include, in pertinent part, anything made or derived from tobacco intended for human consumption, including any components, parts, and accessories of such products, it only gave FDA the immediate authority over certain types of tobacco products, e.g., cigarettes, cigarette tobacco, smokeless tobacco, and roll-your-own-tobacco. These four product types are the only product types currently regulated by the FDA under the Tobacco Control Act. In addition, the new law also gave FDA the ability to use its rulemaking procedures to promulgate a regulation that would "deem" other, currently unregulated, tobacco products under its tobacco authority. In April 2014, FDA published a Notice of Proposed Rulemaking for the Deeming Regulation which proposed to extend its regulatory authority to other tobacco products that were not initially captured by the Tobacco Control Act, including cigars, shisha/hookah, pipe tobacco, and e-cigarettes/e-liquid that contain nicotine derived from tobacco.

The Deeming Regulation, as proposed, would treat all deemed products in essentially the same manner as the currently regulated products under a one-size-fits-all regime, subjecting the newly covered products to the same requirements including, among other things, facility registration, product and ingredient disclosures, Harmful and Potentially Harmful Constituent (HPHC) testing and reporting and, critically, the premarket authorization requirements for "new" products. Under the Tobacco Control Act, any regulated tobacco product not marketed on or modified after the February 15, 2007 grandfather date is a "new" product that requires FDA marketing authorization - via either a Premarket Tobacco Application (PMTA) or Substantial Equivalence (SE) Report - before it can enter the market. For more on the Tobacco Control Act requirements that will apply to deemed products including e-vapor products, see "FDA Regulation of E-Cigarettes - Are You Prepared?"

In October 2015, having completed its review of the over 135,000 public comments received, FDA submitted its draft version of the final Deeming Regulation to the Office of Management and Budget (OMB), Office of Information and Regulatory Affairs. This is the final step in the rulemaking process. Subsequently, from November 2015 through January 2016, OMB met with industry stakeholders and members of the public health community to hear their concerns about the pending rule. The final rule is expected to be published this year, during the Obama administration according to Mitch Zeller, Director of FDA's Center for Tobacco Products.

Given that there were virtually no e-vapor products on the market as of February 15, 2007, effectively all e-vapor products would be considered new tobacco products requiring premarket authorization. Further, because the SE process requires a manufacturer to compare their product to a "predicate" product (i.e., a grandfathered product, or a product authorized previously for sale through the SE process), if the grandfather date is not amended, the only pathway to market for e-vapor products would be through the PMTA process. For more on potential alternative grandfather dates for deemed products, see "The Grandfather Date - What are FDA's Alternatives?"

The Cole-Bishop amendment to the 2017 Agricultural Appropriations bill would change the grandfather date specifically for deemed products from February 15, 2007 to the effective date of the Deeming Regulation (i.e., most likely sometime in 2016). If this amendment becomes law, any nicotine-containing e-vapor products on the market as of the effective date of the final rule would be grandfathered and, although such products would still have to comply with the rest of the Tobacco Control Act, could avoid the lengthy and expensive PMTA process. Grandfathered products could also serve as predicate products for future SE Reports for new products intended to be marketed after the new grandfather date.

In addition to changing the grandfather date for deemed products, the amendment also includes language that will:

Require FDA to begin rulemaking to establish a product standard for e-vapor product batteries within 1 year of the effective date of the Deeming Regulation, and publish a final product standard for e-vapor product batteries within 2 years of the effective date of the Deeming Regulation.

Cause an e-vapor product to be considered misbranded under the FDCA if it is advertised in a newspaper, magazine, periodical, or any other publication other than an adult publication (i.e., a publication with 15% or less of its readership from readers younger than 18 years of age, and read by fewer than 2 million persons under 18 years of age).

Require retailers to sell e-vapor products in direct face-to-face exchanges without the use of any electronic or mechanical devices, such as a vending machine. This provision contains an exemption for mail-order sales (i.e., internet), and allows the use of vending machines or self-service displays if the machine or display is located in a facility where the retailer can ensure no persons under the age of 18 would be permitted to enter (i.e., adult-only facilities).

Require publication, within 1 year of the effective date of the Deeming Regulation, a regulation that would require e-vapor products to be labeled with the phrases "Keep Out of Reach of Children," and "Underage Sale Prohibited," as well as feature an accurate statement of the nicotine content of the product.

Requires retailers (e.g., vape shops) to register their establishment with FDA unless such retailer has already registered under any state or federal law.

What Next?

While it is certainly good news for the e-vapor industry, the Cole-Bishop amendment still has a long way to go before it becomes law. Both the House and the Senate will eventually have to vote on and pass the Agricultural Appropriations bill (with the amendment), which must ultimately be signed by the President. In addition, it is not yet clear when the bill will advance through Congress and make its way to the President, as recent budget bills have been passed in the final days of the previous fiscal year. It is very possible, if not probable, that the Deeming Regulation will be published before the Agricultural Appropriations bill becomes law, likely leading to additional showdowns between anti-tobacco and vaping advocates over the public health and economic impact of FDA's rule, and the need to change the grandfather date for deemed products.

If you have any questions about the forthcoming Deeming Regulation and the premarket authorization requirements for new products, please contact us. For more information about our Tobacco and E-Vapor practice, click here.